By Pam Martens and Russ Martens: June 5, 2019 ~ It felt like headline writers were out to engineer a stock market rally yesterday by scaring hedge funds that had shorted the market to the tune of tens of billions of dollars. When traders who are short the market act simultaneously on breaking news, (news that suggests the stock market is going to rally), by buying back stock to close out their short positions, that causes a big upward spike in the stock market. In Wall Street parlance, it’s called a short squeeze. It happens a lot in a secular bear market and is a head fake to investors desperately looking for a bullish trend. A number of major business publications put a bullish spin on what the Chair of the Federal Reserve, Jerome Powell, actually said in his opening remarks yesterday morning at a conference sponsored by the Federal … Continue reading →

By Pam Martens and Russ Martens: June 4, 2019 ~  On August 26, 2015 the market capitalization of just five Big Tech stocks totaled $1.889 trillion at the close of trading that day. Here’s the tally: Apple $625.532 billion; Google, $440.767 billion; Microsoft, $341.594 billion; Facebook, $245.795 billion and Amazon, $234.215 billion. At the close of trading yesterday, those numbers stacked up like this: Apple $797.366 billion; Google $720.206 billion; Microsoft $918.312 billion; Facebook $467 billion; and Amazon, $833.365 billion – or a total of $3.736 trillion – almost a doubling of market value in less than four years. Of particular note is that Amazon has increased its market value by more than three and a half times, despite its inability to show profits for much of its existence. In December 2013, the International Business Times reported as follows about Amazon’s abysmal history of profits: “So what’s with Wall Street’s … Continue reading →

By Pam Martens and Russ Martens: June 3, 2019 ~ U.S. Treasury Secretary Steve Mnuchin (a/k/a the former foreclosure king) has been attempting to dismantle regulatory restraints on Wall Street’s worst instincts since he took office. Making Mnuchin even more dangerous is the fact that, under statute, he simultaneously sits as head of the Financial Stability Oversight Council (F-SOC) even as he appears to be attempting to undermine financial stability in the U.S. One of Mnuchin’s most alarming actions on behalf of F-SOC came last October 17 when the Council announced that it was removing the designation of Prudential Financial as a SIFI – a Systemically Important Financial Institution that required enhanced supervision and prudential standards. Mnuchin stated at the time: “The Council’s decision today follows extensive engagement with the company and a detailed analysis showing that there is not a significant risk that the company could pose a threat … Continue reading →

By Pam Martens and Russ Martens: May 30, 2019 ~  Thanks to former FBI Director James Comey, there are now acceptable times when the 19th century word “Lordy” can be demonstrably exclaimed in public settings. For example, it can be used with pretty much anything to do with the President of the United States or, as we are now suggesting, when referring to the management of Trump’s serially-charged banking establishment, Deutsche Bank. After setting an historic intraday low of $6.82 yesterday on the New York Stock Exchange, shares of Deutsche Bank mustered a tiny rally in the last half hour of trading today to eke out a close of $6.91. Just 12 years ago, this was a $120 stock. The bank now has a market capitalization of $14.18 billion supporting assets of $1.6 trillion. (Perhaps “supporting” is not the right word. Lordy!) According to the bank’s 2018 annual report, it … Continue reading →

By Pam Martens and Russ Martens: May 30, 2019 ~ Financial media is buzzing this week that a Federal District Court Judge for the Southern District of New York, Jesse Furman, has ruled that the City of Providence, Rhode Island, the Plumbers and Pipefitters National Pension Fund, along with other plaintiffs, can move forward with their class action lawsuit against seven stock exchanges, including the New York Stock Exchange and Nasdaq, for allegations that they effectively rigged the market against the small investor. That sounds like a great David versus Goliath court case is moving right along toward a triumph for justice – until one looks at the gritty details of the case. The lawsuit was launched five years ago following the publication of the book, Flash Boys, by bestselling author and Wall Street veteran, Michael Lewis. The book mapped out, with eyewitness accounts and extensive detail, how the stock … Continue reading →

By Pam Martens and Russ Martens: May 28, 2019 ~ Simon Potter, who runs the Federal Reserve’s open market operations at the Federal Reserve Bank of New York, is stepping down at the end of this week, as is Richard Dzina, head of the New York Fed’s Financial Services Group. Wall Street is buzzing over the fact that the two are long-tenured executives at the New York Fed;  are exiting simultaneously, and with only a four-day notice to the public and the markets – suggesting that their departure may not have been voluntary. The praise lavished on the pair in the press release issued today by John Williams, President of the New York Fed, also suggests that an effort is being made to soften the blow of their surprise departure. Potter is responsible for carrying out the monetary policy mandate of the Federal Open Market Committee (FOMC) by supervising the … Continue reading →

By Pam Martens and Russ Martens: May 28, 2019 ~  Wall Street is the only industry in America that is allowed, in broad daylight, to operate its own private justice system while making its employees and customers sign binding contracts to take their complaints to that venue to seek justice. That’s like sticking your arm into the mouth of an alligator that just grabbed your purse and expecting to come out whole. Endless reports by journalists on how rigged this private justice system is have done nothing to reopen the nation’s courthouse doors to claims against Wall Street. Not only do the general counsels of Wall Street’s biggest global banks get to fashion their own system to hear claims against the banks but they get to meet in secret for two decades to strategize on other topics impacting their common interest. In 2016, Bloomberg reporters Greg Farrell and Keri Geiger broke … Continue reading →

By Pam Martens and Russ Martens: May 24, 2019 ~ Most stock owners of J.C. Penney never thought they’d see the day when it traded as a penny stock. But that’s what happened yesterday when shares of the large retailer closed at 91 cents, a loss of 9.79 percent on the day. The macro picture is that J.C. Penney employs 95,000 people and operates 864 stores across the United States. Its future will have an impact on jobs and commercial real estate prices in the United States. At 91 cents a share, those prospects aren’t looking too good right now. The broader markets fared better than J.C. Penney yesterday but were, nonetheless, a sea of red. After being down more than 400 points intraday, the Dow Jones Industrial Average closed with a loss of 286 points or 1.11 percent at 25,490. The Nasdaq, laden with tech losers, lost 122.5 points … Continue reading →

By Pam Martens and Russ Martens: May 23, 2019 ~ U.S. Treasury Secretary Steve Mnuchin appeared yesterday before the House Financial Services Committee. You know it was a bad day for the Secretary when the low point was not Congressman Stephen Lynch’s request to the Chair, Maxine Waters, to have Mnuchin held in contempt for not following the statute that calls for the IRS to turn over tax returns on any American when requested by an authorized Committee of Congress. Mnuchin has said he will not turn over the tax returns of the President of the United States, which are under subpoena by Congress. (The Internal Revenue Service, which holds these tax returns, is an agency of the U.S. Treasury.) Waters said she will seek the advice of the Committee’s counsel on the contempt request. A number of Democratic members of the Committee intensely questioned Mnuchin on  his myriad deregulatory … Continue reading →

By Pam Martens and Russ Martens: May 22, 2019 ~ Reading the New York Times is apparently now seen as being disloyal to the President of the United States if you’re a Federal employee. Just holding the newspaper in one’s hands might be enough to become an early pensioner in the Trump administration. Yesterday it became crystal clear at a Senate Banking hearing just how terrified people are in the Federal government of getting on the wrong side of the President and ending up being publicly bashed on his Twitter page. The Senate Banking hearing on Tuesday was called to get answers from the witness panel on how to combat money laundering in the United States by shell companies that keep their real owners a secret. But it quickly became a hearing also about the bombshell report from the New York Times on Sunday. That article, by David Enrich, describes … Continue reading →